Bus deregulation is here to stay outside London. Metrolink was never originally envisaged as a street tramway and was merely intended to have a short city centre street section as building an underground link was unaffordable and technically challenging. The street-running sections are very slow and it is likely that they are a drag on the performance of the system. Metrolink stops are difficult to site because of the size and requirements for a 4car high platform stop, and therefore they are further apart than might be desirable.
Greater Manchester will be getting devolved transport powers once it has its elected mayor. The Buses Bill also effectively gives local authorities the right to regulate its buses if they desire.
Metrolink started out being a light-rapid transit system but with the Eccles, Ashton and Airport lines it now has a lot of street running. Are they slower than other street running systems?
You can see the distance between stops here:
http://www.railforums.co.uk/showpost.php?p=1358782&postcount=3
Some stops are less than 500 metres apart, standard for bus spacing in most European countries.